Indeed, the two are now among four firms competing for three 3G spectra (Times of India, 2010), implying that if competition had not erupted between the two that Bharti would have been able to gain access to the spectra without engaging in a bidding war. Trust has been shown by Ng, Lau and Nyaw (2007) to be a precursor to success in international joint ventures.
Question 3. In order to deal with the concerns outlined above, Sunil Mittal can take a number of different steps. To deal with the concern of strategy misalignment, Mittal needs to put into place complex management and governance systems. This is required of international joint ventures specifically to ensure that the joint venture is always working towards the strategic objectives of both parent companies, not just one. Without such structures and systems, the joint venture will suffer from operational instability and resource misallocation (Luo, Tan & O'Connor, 2001).
Some of the human resources challenges can be addressed at the operational level. Training can be introduced in order to prepare foreign managers entering India for the norms of that business culture. In addition, management of both parent companies should lay down the framework for improved cross-cultural understanding. Communication should be at an enhanced level, where messages are made to be clear. This is particularly important given the nature of the joint ventures, where most managers from each company are using English, which is not their first language, as the primary language of communication.
Lastly, trust can be fostered between joint venture partners. Girmscheid and Brockmann (n.d.) propose that trust between parties can be mediated. Communication should act as a symbolic interaction between the parties -- therefore the more communication the more trust can be fostered. Both parties will be aware of the benefits of the venture to each other, but any changes in the benefits or objectives should be revealed through communication. It is not necessarily the case the changes in circumstances would be viewed negatively. In a changing environment, both parties will be subject to constantly...
Communication between the parties is the best way to foster trust in the joint venture process, and this in turn will increase the chances of the joint venture enjoying success.
Communication is the focal point of success for Sunil Mittal, in particular when addressing potential issues with the joint venture partners. There is risk inherent in all joint venture partnerships but much of that risk is felt by both parties -- be it issues of trust or issues of information or technology transfer. As a result, the underlying success factor that best serves Sunil Mittal for the continued growth of Bharti is to utilize communication to build trust with his joint venture partners.
Works Cited:
Ng, E. (2010). WSJ India goes mobile with Bharti Airtel. Marketing-Interactive.com. Retrieved April 5, 2010 from http://www.marketing-interactive.com/news/18531
O'Connor, N. & Chalos, P. (1999). Challenge for successful joint venture management in China: Lessons from a failed joint venture. Multinational Business Review. Retrieved April 5, 2010 from http://findarticles.com/p/articles/mi_qa3674/is_199904/ai_n8840484/
Cyr, D. (1995). The Human Resource Challenge of International Joint Venture. Westport, CT: Quorum Books.
Ng, P., Lau, C., & Nyaw, M. (2007). The effect of trust on international joint venture performance in China. Journal of International Management. Vol. 13 (4) 430-448.
No author. (2010). Bharti, Vodafone, RCom, Tatas bid for 3G. Times of India. Retrieved April 5, 2010 from http://timesofindia.indiatimes.com/biz/india-business/Bharti-Vodafone-RCom-Tatas-bid-for-3G-/articleshow/5698815.cms
Luo, Y., Tan, J. & O'Connor, N. (2001). Strategic response to a volatile environment: The case of cross-cultural cooperative ventures. Asia Pacific Journal of Management. Vol. 18 (1) 7-25.
Girmscheid, G. & Brockmann, C. (no date). Trust as a success factor in international joint ventures. ETH Zurich. Retrieved April 5, 2010 from http://crgp.stanford.edu/publications/conference_papers/Brockmanntrust.pdf
